As businesses, large and small, continue to adapt to post-pandemic realities, the demand for flexible working solutions continues to surge. The part-time office offers companies the ability to rent office spaces on a part-time basis—often for just one to three days a week— whilst opening a unique opportunity for occupiers, landlords, operators, and investors.
The shift toward hybrid working models has created both challenges and opportunities within the office market. With 83 percent of organisations adopting hybrid working practices, according to CIPD, traditional full-time office spaces are no longer the default choice for many companies. This has given rise to the concept of part-time offices, which allow different businesses to share the same space throughout the week. For example, one company may occupy the space for two days, while another takes over for the remaining three days.
This model is particularly appealing to start-ups and early-stage growth companies, where hybrid working is more deeply ingrained, and budgets are tighter. However, larger businesses are also seeing the benefit of part-time arrangements, using them to secure premium locations without committing to full-time leases. Even companies that were previously fully remote are exploring part-time offices, seeing them as a strategic investment that boosts employee collaboration and customer engagement.
For the office market, this represents a new source of growth. The rise of part-time offices not only maximises the use of available space but also attracts businesses that would otherwise have remained fully remote. This trend expands the revenue potential for landlords and investors, particularly those with flexible portfolios.
Legal considerations for part-time arrangements
While the growth potential is clear, part-time office arrangements bring a set of legal issues that must be addressed by all parties involved. Sharing space with other businesses, even on separate days, raises concerns about the condition in which the office is left for the next tenant. Inadequate handovers could lead to disputes, and in such cases, landlords may be called upon to mediate. Establishing clear processes for the transfer of space between different occupiers—such as cleaning and maintenance schedules—can help prevent conflicts.
Another consideration for property owners and occupiers, if an office is shared by multiple companies throughout the week, is ensuring the security of sensitive information. Clear protocols should be established to safeguard occupiers’ equipment and data when they are not physically present in the office.
A further legal issue arises when considering financing agreements. Buildings financed by lenders may face restrictions on the types of tenancies they can accommodate. For landlords, obtaining consent from their lenders is a crucial step before offering part-time office spaces. Without proper approval, landlords could find themselves in breach of covenants, leading to potential disputes with lenders.
Wider considerations for occupiers, operators, and landlords
For occupiers, the benefits of part-time offices extend beyond cost savings. Flexible office arrangements can support employee well-being, offering a balance between remote and in-office working that promotes productivity. However, they must also carefully consider the implications of sharing space.
Property owners and serviced office providers stand to benefit greatly from the rise of part-time offices. Research from flexible workspace platform Hubble suggests that around 25 percent of customers at specialist serviced office providers have requested additional days, upscaled their space, or transitioned to full-time arrangements. This indicates that part-time offices can serve as a stepping stone toward more permanent commitments, boosting revenue and enhancing customer loyalty rather than a cannibalisation of existing tenants on longer term leases. Operators should be prepared to offer flexible, scalable solutions that can accommodate the changing needs of their clients, whether they require additional office days or a full-time space.
For landlords, part-time offices offer a solution to the challenge of underutilised space but they must ensure their buildings are equipped to meet the needs of tenants
For landlords, part-time offices offer a solution to the challenge of underutilised space. With occupancy rates for flexible workspaces typically ranging between 80 percent and 85 percent, part-time offices can help fill the gap, increasing overall building occupancy and generating new revenue streams. Ancillary services, such as meeting rooms and on-site amenities, can further contribute to profitability, as higher footfall from multiple occupiers leads to greater demand for these resources.
However, landlords must ensure that their buildings are equipped to meet the needs of part-time tenants. High-quality broadband, ergonomic furniture, and ample natural light are essential for attracting occupiers. Additionally, larger buildings with smaller, compartmentalised office spaces are better suited to part-time arrangements. Landlords should also be mindful of potential disputes between occupiers sharing space on different days, and work to establish clear guidelines for the use of shared amenities and the handover of office space.
The rise of part-time offices represents a transformative shift in the office market, one that aligns with the evolving needs of modern businesses. By offering flexible solutions that appeal to both small and large companies, part-time offices create new revenue opportunities for landlords, operators, and investors. However, the model also brings with it a host of legal and operational considerations that must be addressed to ensure its long-term success. As the market continues to evolve, those who embrace this trend will be well-placed to shape the future of flexible working, reaping the rewards of a growing and dynamic office sector.
Image: Kragelj
October 21, 2024
The rise of the part time office opens up a new frontier for market growth
by David Rawlence • Comment, Flexible working, Property
The shift toward hybrid working models has created both challenges and opportunities within the office market. With 83 percent of organisations adopting hybrid working practices, according to CIPD, traditional full-time office spaces are no longer the default choice for many companies. This has given rise to the concept of part-time offices, which allow different businesses to share the same space throughout the week. For example, one company may occupy the space for two days, while another takes over for the remaining three days.
This model is particularly appealing to start-ups and early-stage growth companies, where hybrid working is more deeply ingrained, and budgets are tighter. However, larger businesses are also seeing the benefit of part-time arrangements, using them to secure premium locations without committing to full-time leases. Even companies that were previously fully remote are exploring part-time offices, seeing them as a strategic investment that boosts employee collaboration and customer engagement.
For the office market, this represents a new source of growth. The rise of part-time offices not only maximises the use of available space but also attracts businesses that would otherwise have remained fully remote. This trend expands the revenue potential for landlords and investors, particularly those with flexible portfolios.
Legal considerations for part-time arrangements
While the growth potential is clear, part-time office arrangements bring a set of legal issues that must be addressed by all parties involved. Sharing space with other businesses, even on separate days, raises concerns about the condition in which the office is left for the next tenant. Inadequate handovers could lead to disputes, and in such cases, landlords may be called upon to mediate. Establishing clear processes for the transfer of space between different occupiers—such as cleaning and maintenance schedules—can help prevent conflicts.
Another consideration for property owners and occupiers, if an office is shared by multiple companies throughout the week, is ensuring the security of sensitive information. Clear protocols should be established to safeguard occupiers’ equipment and data when they are not physically present in the office.
A further legal issue arises when considering financing agreements. Buildings financed by lenders may face restrictions on the types of tenancies they can accommodate. For landlords, obtaining consent from their lenders is a crucial step before offering part-time office spaces. Without proper approval, landlords could find themselves in breach of covenants, leading to potential disputes with lenders.
Wider considerations for occupiers, operators, and landlords
For occupiers, the benefits of part-time offices extend beyond cost savings. Flexible office arrangements can support employee well-being, offering a balance between remote and in-office working that promotes productivity. However, they must also carefully consider the implications of sharing space.
Property owners and serviced office providers stand to benefit greatly from the rise of part-time offices. Research from flexible workspace platform Hubble suggests that around 25 percent of customers at specialist serviced office providers have requested additional days, upscaled their space, or transitioned to full-time arrangements. This indicates that part-time offices can serve as a stepping stone toward more permanent commitments, boosting revenue and enhancing customer loyalty rather than a cannibalisation of existing tenants on longer term leases. Operators should be prepared to offer flexible, scalable solutions that can accommodate the changing needs of their clients, whether they require additional office days or a full-time space.
For landlords, part-time offices offer a solution to the challenge of underutilised space. With occupancy rates for flexible workspaces typically ranging between 80 percent and 85 percent, part-time offices can help fill the gap, increasing overall building occupancy and generating new revenue streams. Ancillary services, such as meeting rooms and on-site amenities, can further contribute to profitability, as higher footfall from multiple occupiers leads to greater demand for these resources.
However, landlords must ensure that their buildings are equipped to meet the needs of part-time tenants. High-quality broadband, ergonomic furniture, and ample natural light are essential for attracting occupiers. Additionally, larger buildings with smaller, compartmentalised office spaces are better suited to part-time arrangements. Landlords should also be mindful of potential disputes between occupiers sharing space on different days, and work to establish clear guidelines for the use of shared amenities and the handover of office space.
The rise of part-time offices represents a transformative shift in the office market, one that aligns with the evolving needs of modern businesses. By offering flexible solutions that appeal to both small and large companies, part-time offices create new revenue opportunities for landlords, operators, and investors. However, the model also brings with it a host of legal and operational considerations that must be addressed to ensure its long-term success. As the market continues to evolve, those who embrace this trend will be well-placed to shape the future of flexible working, reaping the rewards of a growing and dynamic office sector.
David Rawlence, is a Partner at Boodle Hatfield
Image: Kragelj